michaelrochonnn/mckinsey-bcg-consulting/creating-shared-value

Creating Shared Value (CSV)

Use this skill when you need to design or evaluate business initiatives that simultaneously advance economic and social goals. This framework moves beyond traditional trade-offs between profit and purpose.

When to Use

• Defining or refining corporate purpose
• Addressing social issues through business operations
• Designing new business models
• Evaluating or transforming CSR initiatives
• Seeking competitive advantage through social innovation
• Aligning ESG strategies with core business operations

Framework Overview

The CSV framework uses a 2x2 matrix with two axes:

• Economic Value: Profitability and financial return
• Social Value: Contribution to society and community well-being

The goal is to identify and design initiatives that achieve BOTH values simultaneously (the "AND" not "OR" logic).

Procedure

1. Map Current Activities

Construct the 2x2 matrix and categorize existing initiatives:

• Bottom-Right (PPP): Pure economic profit, low social value (Traditional Capitalism)
• Top-Left (CSR): Pure social value, low economic return (Philanthropy)
• Bottom-Left: Low economic and social value (Activities to eliminate)

2. Target the Top-Right Quadrant

Identify the CSV zone (Top-Right):

• High economic value AND high social value
• Policies and operating practices that enhance competitiveness
• Simultaneously advancing economic and social conditions
• This is the target state for strategic initiatives

3. Design CSV Initiatives

Develop initiatives that follow the CSV logic:

• Ask: "How can we solve social problems in ways that also strengthen our business?"
• Look for intersections between business needs and societal challenges
• Examples: Supply chain development, health and wellness programs, environmental efficiency

4. Validate Alignment

Ensure initiatives meet CSV criteria:

• Does it advance company competitiveness?
• Does it create measurable social progress?
• Is it integrated into core operations, not just philanthropy?
• Does it create sustainable value (not one-off)?

Key Principles

• Logic is "AND" not "OR": Economic value AND social value, not trade-offs
• Not Philanthropy: CSV is about core business, not charitable giving
• Strategic Integration: Social impact must strengthen the business model
• Measurable: Both economic and social outcomes should be quantifiable

Output

Generate strategic directions and business initiatives that create mutual benefit for the company and society.